Equity Cost of Capital Assignment | Homework For You
June 8th, 2020
Suppose the market portfolio has an expected return of 10% and a volatility of 20%, while Microsoft’s stock has a volatility of 30%.
a. Given its higher volatility, should we expect Microsoft to have an equity cost of capital that is higher than 10%?
b. What would have to be true for Microsoft’s equity cost of capital to be equal to 10%?Get Finance homework help today